The worst of the Star Wars movies, and also the one with the stupidest title (although Attack Of The Clones is daft, it doesn't sound like a name of a Scooby Doo episode).
Let's just look closely at the plot for a second..
Qui-Gonn Jinn and Obi-Wan Kenobi are sent to Naboo to negotiate an end to the blockade imposed by the Federation.. oh my god I'm yawning already. They rescue Padme and end up on Tatooine. Sadly without a hyperdrive.
So Qui-Gonn uses the Force to cheat at gambling with the locals, and enlists a 10 year old to race in an incredibly dangerous local sport. Does he care if the little squirt ends up as toast? No, not really - he didn't go there to rescue slaves. Anyway, they eventually manage to scam their way off the planet, taking Anakin with them since his midichlorians are off the scale. Uh huh.
Back on Coruscant, the Jedi Council pronounce Anakin unsuitable for Jedi training, so Qui-Gonn decides to do it anyway.
Cut to big battle on Naboo, carnage, improbable battle tactics, and didgeridoos cluttering up the soundtrack whenever we see the Gungans.
Darth Maul (one of the more rubbish Sith lords) kills Qui-Gonn and gets killed by Obi-Wan. Anakin saves the day. Palpatine starts touching him. Big street party, the end.

The special effects resemble something done to show off Luca's special effects workshop rather than anything to advance the story. Sadly, these effects are trounced by the WETA of LOTR fame.
Rubbish acting throughout, with wooden, humourless performances from all except Liam Neeson as Qui-Gonn and that guy who plays Palpatine.

Characters:

R2D2 - as usual, saves the day

C3PO - Annoying as ever

Qui-Gonn Jinn - now we found out what the Jedi were really like, a bunch of dodgy bastards

Obi-Wan Kenobi - should have been played by Russell Crowe.
Padme - Mmm, Natalie Portman.. shame she wasn't anywhere near as good as she is in Leon, or anything else

Palpatine - Like Liam Neeson, played by a great actor trapped amongst a cast of CG and equally lifeless actors

The Urban Dictionary Mug

The first installment of the new Star Wars "prequel" trilogy. Not the worst Star Wars movie. Definitely not the best, but Attack of the Clones is BY FAR the worst movie.

Reasons The Phantom Menace is not the worst Star Wars movie:
- the podracing scene is pretty awesome
- free of Lucas' notoriously bad romance scenes
- the finale with multiple battles going on at once is spectacular, particularly the Qui-Gon & Obi-Wan vs. Darth Maul lightsaber duel, which is the most intense lightsaber fight of all 6 movies
- it was responsible for getting a whole new generation into Star Wars -- speaking from experience, this movie got me into the original trilogy when I was a kid (of course I now like the original trilogy far more than this movie)

Reasons it still kind of sucks:
- Anakin and Padme's dialogue is horribly stilted, and the movie is really not very well-acted on the whole
- It doesn't really seem like anything important happens, other than scooping up Anakin from Tatooine
- Jar Jar Binks. enough said.